Pacific Ethanol sets second quarter record for ethanol sales

Pacific Ethanol Inc. has released second quarter financial results, reporting the company sold a record 140.7 million gallons of ethanol during the three-month period.

Net sales were $277.6 million, down from $321.1 million during the same quarter of the prior year. The decline in net sales is attributed to a decrease in the average sales price per gallon of ethanol, partially offset by an increase in total gallons sold.

Gross profit was $6.3 million for the second quarter of 2015, compared to $33.6 million for the second quarter of 2014, reflecting a decrease in margins compared to the prior year.

Operating income was $2.3 million, down from $29.3 million during the second quarter of 2014, while net income available to common stockholders was $700,000, or 3 cents per diluted share, down from $15.3 million, or 68 cents per diluted share, during the same quarter of last year. Adjusted EBITDA was $5.4 million, down from $27.8 million during the second quarter of 2014.

“Our second quarter 2015 financial results reflect improved performance as we grew net sales 10 percent sequentially while reporting a record total gallons sold,” said Neil Koehler, president and CEO of Pacific Ethanol. “With ethanol now integral to the U.S. transportation fuel supply and ethanol demand expanding in both the U.S. and world markets, we are confident in the growth opportunities for our business.”

During an investor call to discuss the quarterly results, Koehler highlighted the potential of export markets for ethanol. “Ethanol is growing in demand around the world. Exports are growing in total volume as global markets incorporate the economic, environmental and performance benefits of ethanol into their transportation fuel requirements,” he said. “Exports are expected to continue to increase beyond the 2014 levels, which represented the second highest annual totals on record.” While the company currently does not have any exports on the books, Koehler said Pacific Ethanol is investigating the opportunity.

According to Koehler, Pacific Ethanol realized several achievements during the second quarter. The company fully consolidated ownership of the four western Pacific Ethanol plants and recently began corn oil production at its Boardman, Oregon, facility. “Significantly, we also just reached a settlement with the Aurora Cooperative, which dismisses all outstanding litigation with the co-op. This very positive development facilitates a mutually beneficial commercial relationship that expands our corn purchase options and should improve the value of our co-product feed,” Koehler continued.

On July 1, following the close of the second quarter, which ended June 30, Pacific Ethanol closed on its acquisition of Aventine Renewable Energy. Pacific Ethanol is now the sixth largest producer of ethanol in the U.S, with eight strategically located plants and 515 MMgy of production capacity. According to Koehler, the company now has a marketing volume of more than 800 million gallons based on historical volumes, and coproduct production capacity of more than 1.5 million tons per year.